DOD Contract Management - High Risk Issue
The Department of Defense (DOD) is the largest contracting agency in the federal government. In fiscal year 2018, it accounted for almost two-thirds of all federal contracts. But the department needs to improve how it tracks, manages, and budgets for its contracted services. GAO added DOD's Contract Management to its High-Risk List in 1992 and has identified three major areas of challenges—the acquisition workforce, service acquisitions, and operational contract support.
DOD spent over $350 billion in fiscal year 2018 on contracts for goods and services like:
- Major weapon systems, such as aircraft, ships, and guided missiles.
- Health care.
- Professional support, such as engineering and other technological expertise.
- Fuel.
Federal Contracting Obligations by Agency, Fiscal Year 2018 (dollars in billions)
DOD also uses contractors to support military operations, such as those in Afghanistan. Contractors provide services including translation, logistics, maintenance, and communications.
However, DOD faces a number of challenges with how it manages its federal contracts.
- DOD reduced the size of its acquisition workforce in the mid-1990s as defense budgets decreased. However, due to concerns about a lack of necessary skills in DOD employees and a growing reliance on contractors, DOD has been rebuilding its acquisition workforce since 2009. A skilled acquisition workforce is vital to maintaining military readiness, increasing DOD’s buying power, and achieving savings.
- DOD has a fragmented and uncoordinated approach to acquiring services through contracts. For example, the department has limited information on what it plans to spend on specific types of contracted services in its budget forecasts, as well as difficulties in clearly defining contract requirements.
- DOD has spent billions of dollars on contractors worldwide to support military activities. However, the department has faced difficulties in identifying capability gaps, developing guidance, and integrating contractor support into its operational plans and training.